May 4, 2006 3:08 PM PDT

Microsoft makes Massive bet on in-game ads

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REDMOND, Wash--After already making a big bet on advertising, Microsoft on Thursday made a Massive one.

As expected, the software maker announced it is buying Massive, a company that serves up advertising into video games.

"That Massive team will be joining Microsoft and the MSN group," said Robbie Bach, president of Microsoft's entertainment and devices group, speaking at the MSN Strategic Account Summit here. "They will become a key part in what we are doing in this space."

The financial terms of the deal were not provided.

Bach said that video game advertising is a potentially great opportunity, but also must be done carefully.

"Make sure whatever you do doesn't interfere with the game playing experience," he said. "Do not interrupt someone when they are gaming. It is a very immersive experience."

But he said, if you put the ads in the game, the ad message can be very effective.

"They get it, and they may not even know they got it," Bach said.

The announcement of the deal, which was reported last week by The Wall Street Journal, was timed to coincide with Microsoft's advertiser conference, which ends Thursday.

Earlier in the day, the software maker gave details of plans to transform its new AdCenter engine from a paid search tool into a vehicle that can one day deliver all manner of advertising into Web sites, video streams and mobile devices.

The AdCenter product is still in its infancy, though. Last quarter, Microsoft saw its revenue per search fall as it switched more of its volume onto AdCenter and away from Yahoo's engine. Microsoft said it is now using adCenter for 100 percent of its U.S. paid search ads.

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paid search, software company, video game, Microsoft Corp., games

7 comments

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Sadly inevitable
There is no aspect of life that isn't touched by advertising and videogames are no different. I played an online RPG a few years ago (set in a medieval fantasy world) that had Amazon.com vendors hanging around the major towns, allowing players to cash in various tokens for additional game content. It just felt wrong: intrusive and anachronistic, a reminder of the commerce-obsessed world people who play fantasy games are often trying to take a break from.

While some advertising may add to in-game realism (a modern citiscape with Nike, Coke and Sony billboards is arguably more 'realistic' than one with non-esistent products), its a short road to intrusive and annoying. Just look at TV.

If ads are going to appear in games, they need to be controlled by the same rules that govern product placement in films. I don't want my lvl 60 Ninja/Warrior/Mage questing for the 'Tylenol Helm of Healing' or the 'Preperation H Pants of Comfort.'
Posted by JFDMit (180 comments )
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True
I thing in game ads can be used, but, like this example, it will be exclusive to certain types of games. Of course, Sports games can be riddled with advertisements. Sports are already "HEAVY" on ads, so this makes "sense" in the game and does not distract. In the Matrix MMORPG, this even works with the cityscape and billboards. However, Fantasy RPGs can NEVER have advertising in them. The Amazon.com vendors would destroy the immersion and wreck the experience.

What worries me most? Does this mean games that are not "appropriate" for advertising be pushed from the market because they will never have this revenue stream?
Posted by umbrae (1073 comments )
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"They get it, and they may not even know they got it"
Sounds awfully subliminal to me and wasn't that outlawed for film and television? No wonder it appeals to Microsoft.
Posted by MadKiwi (153 comments )
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More proof that MS is stupid
You can not throw ads into a game in any manner, and still retain immersiveness. It is a contridiction.

Typical of MS. How about creating a game so damn good, people won't might paying a bit more? Oh wait, this is MS we are talking about.
Posted by Bill Dautrive (1179 comments )
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Indeed...
You can put advertisements in games and retain the immersive
nature of the experience. Massive's existence proves this. If it
didn't work, the company wouldn't be in business. While certain
genres of game don't lend themselves too well to advertising, there
are more and more that do.

It's smart business on the part of Microsoft. See a trend that works,
jump on it and eventually profit from it.
Posted by nightveil (133 comments )
Link Flag
Yes of course.
But you can throw ads into a movie and keep it immersive? I think it's a bit more complicated than either-or... =P

In-game advertisement definately has quite a large potential, if done discretely and eloquently.
Posted by ImperialPanda (8 comments )
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Microsoft's contribution to gaming - Advertisements
But hey, they're "doing it for their users".

Yeah right.

They're in the face of users.
Posted by technewsjunkie (1265 comments )
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